The Overlooked Costs of the Permanent War Economy: A Market Process Approach
Christopher J. Coyne
George Mason University - Department of Economics
Thomas K. Duncan
Radford University - Department of Economics
July 26, 2012
The Review of Austrian Economics, Forthcoming
GMU Working Paper in Economics No. 12-51
How does the permanent war economy interact, and subsume, the private, non-military economy? Can the two remain at a distance while sharing resource pools? This paper argues that they cannot. Once the U.S. embarked upon the path of permanent war, starting with World War II, the result was a permanent war economy. The permanent war economy continuously draws resources into the military sector at the expense of the private economy, even in times of peace. We explore the overlooked costs of this process. The permanent war economy does not just transfer resources from the private economy, but also distorts and undermines the market process which is ultimately responsible for improvements in standards of living.
Number of Pages in PDF File: 33
Keywords: War Economy, National Defense, Economic Calculation, Interventionism
JEL Classification: B53, H00, H56, P50
Date posted: July 28, 2012 ; Last revised: October 1, 2012
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